Fran McPhair Dance Studios is a chain of 45 wholly owned dance
studios that offer private lessons in ballroom dancing. The studios
are located in various cities throughout the southern and
southeastern states. McPhair offers a set of 12 private lessons;
students may pay for the lessons one at a time, but each student is
required to enroll for at least a 12-lesson plan. The 20-, 40-, and
100-lesson plans offer savings. Each dance instructor is paid a
small salary plus a commission based on the number of dance lessons
provided.
Required
1. McPhairA????1s owner is interested in a strategic analysis of the
business. The owner wants to understand why overall profitability
has declined slightly in the most recent year while other studios
in the area seem to be doing well. What is the proper cost object
to begin this analysis? Explain your choice.
2. For each of the cost elements determine the cost classification
from the following list for the cost object you chose in
requirement 1. (In some cases, two or more classifications may
apply.)

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